The report cites to studies that "57% of all app users have
either uninstalled an app over concerns about having to share their
personal information, or declined to install an app in the first
place for similar reasons," and that "in a 2011 survey of
U.S. smartphone users, less than one-third of survey respondents
reported feeling in control of their personal information on their
mobile devices." Mobile Privacy Disclosures, p.3.
Indeed, the report set forth as a key theme arising from the
agency's workshops on this issue that "consumers do not
know or understand current information collection and use practices
occurring on mobile devices." (p. 10)

To address what the agency sees as widespread confusion,
Mobile Privacy Disclosures sets forth "best practice
recommendations" for platforms, app developers, third parties
such as ad networks and analytics companies, and app trade
associations. While Reed Smith's privacy team will review these
recommendations in more detail, some key points include:

For App Platforms

A definite focus on pushing app platforms, as "gatekeepers
to the app marketplace" (p. 11) to set and enforce privacy
disclosure standards

That platforms should get "affirmative express
consent" through "just-in-time disclosures" before
giving apps access to sensitive personal information (p. 15)

That the app review process by platforms should be more
transparent to users (p. 20)

For App Developers

That app developers "should have a privacy policy and make
that policy available through the platform's app store"
(p. 22), but that "app-level disclosures [should] not repeat
the platform-level disclosures" (p. 23)

The report also laments that "It is common for app
developers to integrate third-party code to facilitate advertising
or analytics within an app with little understanding of what
information the third party is collecting and how it is being used.
App developers should take responsibility for understanding the
function of the code they are utilizing." (p. 24)

For App Networks

"Ad networks and analytics providers should help app
developers better understand how this code works and what it
does." (pp. 24)

"In addition, advertising networks should work with
platforms to ensure implementation of an effective DNT [Do Not
Track] system for mobile. (pp. 24-25)

App trade associations were urged to promote industry standards
for consistent and effective communication of requirements.

Mobile Privacy Disclosures places a special emphasis on
the privacy challenges raised by locational data. The report noted
that "if the data falls in the wrong hands, the data can be
misused and subject consumers to harms such as stalking or identity
theft." Mobile Privacy Disclosures, p.3.

Mobile Privacy Disclosures was released alongside the
announcement that Path, Inc. agreed to settle charges that its
social networking app violated the FTC Act and the Children's
Online Privacy Protection Act (COPPA). The FTC alleged that Path
automatically collected users' address book data from their
mobile devices without disclosing that data collection.

The FTC also alleged that Path allowed children under the age of
13 to register for their services and did not adequately disclose
the service's data collection practices, did not notify parents
of the information the service collected from children under the
age of 13, and did not obtain verifiable parental consent. The FTC
also highlighted a photo upload feature of the app that invited
users, including children, to include geolocation information on
the photo upload, as being especially problematic.

The settlement prohibits Path from making misrepresentations
about its data collection practices. In an injunctive provision
that requires Path to clearly and conspicuously disclose its data
collection from mobile devices, the FTC states that categories of
information accessed or collected from a user's mobile device
must be disclosed separate from any "privacy policy,"
"terms of use," "blog," "statement of
values," or similar document. In addition, Path must obtain a
user's affirmative express consent to access or collect such
information. The notice and consent must occur prior to data
collection. The FTC does not specify whether such disclosure and
consent must occur prior to download at the platform level, or if
disclosure once the app is downloaded is sufficient. What is clear
is that burying the disclosure in a privacy policy, even in a short
form in-app policy, will not pass muster.

The settlement requires Path to pay a civil penalty of $800,000
and establish and implement a comprehensive privacy program. Path
agreed to comply with COPPA by disclosing its data collection from
children, notifying parents of such data collection, and obtaining
verifiable parental consent. In addition, Path is prohibited from
using any of the data it collected on children, and must delete
that data within 10 days of the agreement.

This article is presented for informational purposes only
and is not intended to constitute legal advice.

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Click to Login as an existing user or Register so you can print this article.

We previously reported here that CNA filed a lawsuit against its insured Cottage Health System seeking reimbursement of amounts that it previously paid under Cottage's cyber liability insurance policy.

The Ashley Madison site declares on its home page that "Life is short. Have an affair." The home page goes on to state that "Ashley Madison is the world's leading married dating service for discreet encounters."

Evidence collected by the U.S. Department of Homeland Defense (DHS) shows that cyberattacks on key energy infrastructure – particularly the electric system – are increasing in both sophistication and frequency.

On Friday, July 24, the United States Judicial Panel on Multidistrict Litigation issued an Order consolidating in the D.C. Circuit Court of Appeals three timely petitions for review of a July 10, 2015 Declaratory Ruling and Order of the Federal Communications Commission (FCC).

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